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Oct. 10 --The Schleswig-Holstein Administrative Court
ruled Oct. 9 in three consolidated cases that companies using Facebook Inc.'s
fan pages can't be held responsible for data protection law violations committed
by the social networking site because the companies couldn't control the use of
the data, according to a statement from the state's data protection authority
(In re Facebook, VG, Nos. 8 A 37/12, 8 A 14/12, 8 A 218/11, 10/9/13).

The ruling overturns an August 2011 order from the Schleswig-Holstein's Data
Protection Authority (ULD) to the companies demanding that they cease using
Facebook fan pages and “like” buttons .

The ULD said that companies and
public entities using web analytics to assess usage patterns from like buttons
and fan pages ultimately have responsibility for data protection compliance. The
entities “cannot shift their responsibility for data privacy” to Facebook, which
does not maintain a physical operation in the country, or to online customers
and other website visitors.

In November 2011, the ULD initiated
enforcement proceedings against the companies for failing to remove their fan
pages from Facebook .

DPA, Chamber of Commerce React

Schleswig-Holstein Data Protection Commissioner Thilo Weichert told Bloomberg
BNA Oct. 10 that he disagrees with the court because fan pages have “quite a lot
of privacy problems, such as using cookies without consent.” He also cited the
lack of opportunity “to contradict or oppose profiling” and a lack of
“transparency on the process of data processing.”

Revelations about the
U.S. National Security Agency's PRISM Internet surveillance program, including
access to Facebook information, makes it more important than ever that companies
be able to decide “what servers they use for communicating with their clients”
and that is not clear when Facebook processes information, he said.

Weichert said it is likely the ULD will appeal following the publication of
the opinion from the administrative court.

But private sector companies
welcomed the ruling. Marcus Schween, general coordinator for law at the
Schleswig-Holstein Chamber of Commerce, told BNA Oct. 10 that “It was important
for us that companies could count on legal protection regarding the use of fan
pages and social networks in general.”

He said that the ULD position that
social networks couldn't be used “was a major challenge for companies in
Schleswig-Holstein” because “their use was allowed in other German states, like
Berlin, Hamburg or Lower Saxony.”

That lead to “market distortion” and
gave an unfair business advantage for companies operating elsewhere in Germany,
he said.

Matthias Scholz, a partner at Baker & McKenzie LLP, in
Frankfurt, told Bloomberg BNA Oct. 10 that “assuming that the companies are
really not able to influence the way Facebook processes data, I think the court
is right to have taken this decision.”

The court “clearly made a
distinction between the processing done by Facebook and that done by the
companies.”

Not Subject to German Law

Under Germany's Data
Protection Act, data controllers located in another European Union member state
are not subject to Germany's data protection law if they collect, process and
use personal data in Germany but “without engaging a branch in Germany for that
purpose.”

In February, the same Schleswig-Holstein administrative court
ruled that Facebook and its European Union operations, Facebook Ireland Ltd, are
not subject to German law because they are not located within the country's
territorial jurisdiction (). In April that ruling was upheld by the Higher
Administrative Court of Schleswig .

“A company responsible for the
processing of personal data, even if established outside the European Economic
Area, can move out of the application of German data protection law by having a
permanent establishment in another member state” and inside Germany merely
having processing equipment, Scholz said.

“This newest decision basically
says that Facebook is responsible for the data processing it undertakes” rather
than the defendant companies because they are “not able to influence what
Facebook is offering or the way it processes its data,” he said.

Although
under the new ruling, Facebook “is responsible for all the data processing,” the
other court rulings take Facebook “out of the application of German data
protection law,” Scholz said.

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